An Act To Improve Corporate Tax Fairness by Amending the Rates Imposed on Corporate Income
Sec. 1. 36 MRSA §5200, sub-§1-A, as enacted by PL 2017, c. 474, Pt. E, §2, is amended to read:
| If the income is: | The tax is: |
| Not over $350,000 | 3.5% of the income |
| $350,000 but not over $1,050,000 | $12,250 plus 7.93% of the excess over $350,000 |
| $1,050,000 but not over $3,500,000 | $67,760 plus 8.33% of the excess over $1,050,000 |
| $3,500,000 or more | $271,845 plus 8.93% of the excess over $3,500,000 |
In the case of an affiliated group of corporations engaged in a unitary business with activity taxable only by Maine, the rates provided in this subsection are applied only to the first $3,500,000 of the Maine net income of the entire group and must be apportioned equally among the taxable corporations unless those taxable corporations jointly elect a different apportionment. The balance of the Maine net income of the entire group is taxed at 8.93%.
In the case of an affiliated group of corporations engaged in a unitary business with activity taxable both within and without this State, the rates provided in this subsection are applied only to the first $3,500,000 of the net income of the entire group and must be apportioned equally among the taxable corporations unless those taxable corporations jointly elect a different apportionment. The balance of the net income of the entire group is taxed at 8.93%.
Sec. 2. 36 MRSA §5200, sub-§1-B is enacted to read:
| If the income is: | The tax is: |
| Not over $350,000 | 3.5% of the income |
| $350,000 but not over $1,050,000 | $12,250 plus 7.93% of the excess over $350,000 |
| $1,050,000 but not over $2,000,000 | $67,760 plus 8.33% of the excess over $1,050,000 |
| $2,000,000 but not over $3,000,000 | $146,895 plus 8.5% of the excess over $2,000,000 |
| $3,000,000 but not over $3,500,000 | $231,895 plus 8.75% of the excess over $3,000,000 |
| $3,500,000 or more | $275,645 plus 9% of the excess over $3,500,000 |
In the case of an affiliated group of corporations engaged in a unitary business with activity taxable only by Maine, the rates provided in this subsection are applied only to the first $3,500,000 of the Maine net income of the entire group and must be apportioned equally among the taxable corporations unless those taxable corporations jointly elect a different apportionment. The balance of the Maine net income of the entire group is taxed at 9%.
In the case of an affiliated group of corporations engaged in a unitary business with activity taxable both within and without this State, the rates provided in this subsection are applied only to the first $3,500,000 of the net income of the entire group and must be apportioned equally among the taxable corporations unless those taxable corporations jointly elect a different apportionment. The balance of the net income of the entire group is taxed at 9%.
Sec. 3. 36 MRSA §5200, sub-§§2 to 4, as amended by PL 2017, c. 474, Pt. E, §3, are further amended to read:
SUMMARY
This bill establishes 2 new tax brackets and 3 new rates for corporate income tax purposes for tax years beginning on or after January 1, 2020. Under the bill, corporate income between $2,000,000 and $3,000,000 is taxed at the rate of 8.5% and corporate income between $3,000,000 and $3,500,000 is taxed at the rate of 8.75%; such income is taxed under current law at the rate of 8.33%. The top tax rate, which is imposed on corporate income over $3,500,000, is increased from 8.93% to 9%.